10 Not-So-Obvious Ways to Thoroughly Screen Potential Tenants

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As a property manager and landlord, I have learned that screening can be the most important element in owning a rental property. Picking the right tenant on paper and in character sets the tone for the next 12-24 months for your investment. This means if you have a great tenant with a smooth system in place, you will have an easier relationship with your property manager, easier time self-managing, and/or you will stay motivated to continue to invest in more passive income generating properties.

In realizing how big the leasing/screening step is, we maximize our marketing efforts to make sure we have the exposure to reach the top tier tenants we want to attract. Once we get them through our units and they love our homes, we then swoop in with our screening process that sniffs out red flags and brings truths to the service to eliminate junk applicants fast.

Below is 10 key components to our screening process that we complete with every applicant.

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10 Not-So-Obvious Ways to Thoroughly Screen Potential Tenants

Request Cleared Past Rent Checks

Since applicants can put anyone down under their previous landlords contact, we came up with the idea to request the most recent three cleared rent checks, front and back. This is assuming they are currently renting.  These cleared check copies tells us the following:

  • Who they are writing their checks to.
  • If the amount matches what they say they are paying and if the amount is the same each month.
  • What day the checks are clearing in the bank. If they are clearing by the 5-8th each month, it is safe to say they paying on or close to the first.

In this day and age with paying through online tenant portals, we request an online payment history and the matching bank statements to line up.

When a tenant says they pay cash, that is a red flag and we request the bank statements that reflect the withdraws, which is usually the end of that applicant.

Related: The True Cost of a Bad Tenant: Why You CAN’T Afford Not to Screen

Check the Tax Records

You can check the tax records to verify the records of landlord provided by the tenant. But if the tenant says that they have been writing checks, it should raise red flags.

screen-tenant

Obtain an Eviction Report

This is the best thing that has happened to landlords in the last decade when it comes to screening. With the help of most of the screening companies or online through the county you live in, it is now easy to see if an applicant has ever been filed on for eviction. You can find judgements on credit reports with this, but most landlords never take it that far, so that applicant’s next three landlords would not realize they were less than perfect tenants until it was too late.

Get Pictures of Pets

Request recent, clear picture of all pets. This will prevent the 35 lb lab mix from becoming the 80 lb pit bull at move in. Pets are not always a bad thing, so seeing a picture of a pet can make you as the screener put your pet guard down a little and treat the deal fairly.

Obtain a Copy of Their Driver’s License

Requesting a clear, color copy of the applicant’s driver’s license will allow you to verify the address to check whether it matches all other documents from the application or not. It shows when the DL was issued and verifies the date of birth. It also allows you to match up the applicant online with social networking sites, such as Facebook, LinkedIn and Twitter, to learn more about them if necessary. The picture will help you make sure you have the right guy.

Perform Online Research

The Internet has done wonders for screening, and in the world we live in today, we can learn so much just from Facebook and LinkedIn. Facebook offers a huge insight, and LinkedIn can sometimes show you people you might have in common with the applicant. This allows you to reach out the common connection as another insight to the applicant’s character and verify they work where they say they do.

Collect Application Fees

We take application fees ($50 per person over 18) not as a profit generator, but as a means to cover the costs associated with screening reports. More importantly, the fees serve as a level of commitment to the property.

I spent the first 6 years not taking an application fee, and multiple times per year an applicant would go through the 24-48 hour process, we would approve them, and they would be gone.  Maybe they found another rental or they just realized they didn’t like our unit. An application fee makes applicants think hard before they submit the application, and if they do pay the application fees and then back out, at least your costs are covered.

On the other hand, it is important not to treat it as a revenue stream because you don’t want to build a reputation of taking application fees and not accepting time and time over. We will often refund applicants’ fees if they are not selected, to be fair. We will keep them if they lie on their application or if they back out.

Aim For a Quick Turnaround

Moving is stressful whether you are 21, 44 or 66. It is a lot of pressure to take everything you own and move it somewhere else — sometimes far, far away. In this renters’ market, it is also stressful as an applicant going up against sometimes 5 or 6 other applicants on the same property. When a tenant submits an application, make sure you inform them of your expectations of how long your underwriting will take. Try to get your questions back to the tenant within the first 24 hours and demand a quick turnaround from them as well.

tenant-screening

Understand Their Reasons For Moving

It is important to understand why they are moving. Are they moving because their place is too small or their work is too far from where they are now? As a screener, it is important to make sure your unit is larger and considerably closer to their work. Otherwise, they will be out looking in 11 months again because they didn’t realize they were making the same mistake again.

Related: The Ultimate Comprehensive List of Tenant Red Flags

Provide Verification of Terms

It is important that the tenant is on the same page with the terms you are expecting. Yes, all those terms will be in the lease, but people don’t always read leases, and you may miss something when you prepare the lease, so what we do is send out an email called “Rental Acceptance Term Email.” This email is a summary of the terms included, such as rent, deposit, term, who pays what utilities, parking, etc. In this email, we also attach the condo association rules and regulations and our tenant expectation handbook. We make the applicants reply to the email that they agree with the terms and the attachments. Even though it will all be in the lease, this email will prevent issues down the road.

Of course, there are a bunch of additional steps we take, like calling and verifying employment, calling previous landlords and looking up any other historical public records, but the 10 points above are processes that have changed our company and many others who have learned from our experience. The fact of the matter is creating passive income needs work. If you want your rental property to provide a constant cash flow, you will have to screen the tenants diligently or you might end up with a lousy tenant.

Landlords: What above-and-beyond steps do you take to thoroughly screen your tenants?

Leave your tips below!

About Author

Mark Ainley

Mark Ainley is founder of GC Realty and Development and GC Realty Investments. Mark has been an active real estate investor since 2003. He started slowly by flipping condos and acquiring a couple of investment properties. Since 2003, Mark and his team have successfully renovated and stabilized over 200 properties.

49 Comments

  1. Kimberly H.

    Great list! Facebook saved us from renting to a tenant who said on their app that they only had two small dogs; according to their FB page they had a “zoo of animals” including another big dog, 2 cats, 2 snakes and a bird!
    If their name is to common to find easily on FB, we search for their personal references and find them that way.

    • Ed Neuhaus

      I would have almost wanted to lease to that person. If they lied on the app about the pets it just gives me a reason to charge more rent. I had a tenant who was “given” two more dogs as a gift. They were upfront about it so I let them keep the pets. But I also got $600 in fees out of them, and raised their rent $50/month. If they would have lied about it I would have gotten $25/day per pet. that would have been awesome.

  2. Ricky Williams

    Great stuff. I’d like to add something.

    If you have any chance at all, get a look at their cars. You want a renter that takes care of their car. Peek in the window if possible. Is it filled up with old coffee cups and fast food bags. Is it all dented up and dirty with 4 tires that don’t match? Broken out window with a trash bag taped over it? You get the point.

    I don’t expect my renters to drive expensive cars. I don’t. In fact, if they own “too much” car, paying rent can be difficult. However, my experience has been that when people don’t take care of the things they own, they won’t take care of things they don’t own either (like the place they live in).

    Just my two cents. I have been extremely lucky on renters and haven’t had a truly bad one. However, when I look at the ones that left the place with the most repairs and the dirtiest, they also didn’t maintain their cars.

  3. Deanna Opgenort

    Hear Hear about the pic of pets. From here on out I’m going to be doing a separate “PET rental agreement”. The one “shepherd mix” turned into a pit/shepherd mix…oh, plus the neurotic, territorial male pit/shepherd mix, and a small insane dog with a history of biting people. Lots of people.
    They are having to move.
    I like being able to allow pets, (some great tenants have had them), but so help me new tenants will initial. Each. And. Every. Rule.

  4. Great article. I was wondering what screening service in particular you use for eviction notice info? Assuming there are services out there that can give this info along with credit report, etc. in one swoop….

  5. Jerry W.

    Wow, excellent article. I am going to take notes. Getting the right tenant has been the most important thing so far in my investing. Most of my problems have come from bad tenants. That is not always not paying, often it is about taking care of things.

  6. James Munson

    One trick I stumbled into while showing SFR’s is walking prospective tenants out walking them back to their car. While there take a quick glance inside of their car. If it’s clean and fastidiously maintained, more than likely that is how they will treat your rental unit. If it’s filthy and cluttered with trash and has fast food restaurant bags and cups crumpled up and thrown in the backseat, it is my experience that they will be filthy tenants and will treat your property the same way. This is a very simple step you can take to gain great insight on a prospective renters cleaning habits.

  7. In this day and age of bank fees for everything, you do realize that three cleared checks will likely cost at least $15.00. I do not understand the part about tax records at all. How can you say writing checks is a red flag? Confusing. No landlord should collect social security numbers and driver’s licenses. The address on the driver’s license should be at least one of the addresses the prospective tenant lived at, but maybe not. When I first came back from a long stint overseas, I had to put friend’s address on my new driver’s license until I found a place to live, which took two months. That friend’s address stayed on my license for many years, until time for renewal. You should not assume that everyone participates in social media, either. Application fees are just plain wrong. Tenants do not need to show “commitment” to your property before they move in.

    The tenant may have a valid reason for not wanting to provide a landlord name. I remember one landlord…the gas company came and shut ff my gas because it was pooling in the appliances, and they were afraid of an explosion. The gas company contacted the landlord, and the result was the landlord had to replace the gas lines to all eight units at a cost of thousands and thousands of dollars. Somehow it was all my fault, and I had no end of trouble with her. I was also worried that the fact that I had always paid the rent on time, and left the place move-in ready would not be enough to keep her from badmouthing me to a prospective landlord. Then there was the place where a skunk found its way into the sub-floor and died there. That landlord was also less than understanding and refused to refund rent and deposit when I left suddenly. He also claimed I stole a piece of furniture. It was clear the he said, she said would probably produce a wash in small claims court, so I let it go.

    So far I see application expenses on the tenant for at least $65. If I were a tenant, you had better be offering me a superlative home with a great landlord at somewhat below market rates to get a great long-term tenant like myself. Otherwise, I might think you see a wallet instead of a person.

    When I was a tenant, I also screened landlords. I cannot tell you how hard it was to get landlords to send me a copy of the rental agreement so that I could read it before deciding to sign it. I do agree with getting pictures of the pet, and checking the car. In my view, the Golden Rule is the best policy for ensuring great tenants.

    • Geoff Van Dusen

      The address on the driver license SHOULD be the last address. By law in every State you are required to update your address within 30 days of moving to a new residence. I would consider this a flag, if a tenant can not follow the law, are they going to follow my rules??

        • Katie Rogers

          They give you a blank card to fill out and carry with you. According to the DMV, you can use any sheet of paper, not just their generic manila card. So the purpose of using the CA drivers license to verify an address is defeated.

    • Deanna Opgenort

      I had an applicant just today who claimed to have been a property manager. When we got to discussing the application fee she was all of a sudden in a huff, claiming it was “unfair” for her to have to pay, since it was for “my” benefit!
      Not surprisingly, other parts of her story had already started to crumble (I usually check local online court records before I call)
      Needless to say, lying combined with the fuss about paying for the screening & she’s a no go.

    • Maggie Tasseron

      For anyone using online banking, getting copies of cleared rent checks is a simple matter and doesn’t cost a dime. Of course, since you “avoid online banking like the plague”, you wouldn’t know that. As for an application fee, that simply weeds out the looky-loos who will gladly waste a landlord’s time and then disappear. There are certainly situations where a tenant has had legitimate problems with a landlord, resulting in the inability for them to obtain a good reference, but in the majority of cases that is not a problem for a person who has been a good tenant who took care of the property and gave proper notice. I wonder about the fact that you yourself have had several problems with landlords and that the ones you mention may only be the tip of the iceberg. Where there’s smoke…

      • Katie Rogers

        You bet where there’s smoke…That’s why I vetted landlords when I was a tenant. That is also why in lieu of giving my personal information, I give outstanding references from landlords. I was a dream tenant who always had “been a good tenant who took care of the property and gave proper notice,” and I expected landlords to appreciate that. Not only did I take good care of the property, but I left it not only broom clean, but move-in ready (not that any landlord ever paid me the cleaning fee they would otherwise have paid a cleaner. Whatever). I made sure there was never any pretext to withhold even a penny of deposit, but that did not keep a couple of landlords from trying anyway.

        As far as looky-loos go, there aren’t any. Good tenants do not want to waste time looking at apartments. If they are looking at your apartment but rent elsewhere, maybe you should consider whether your apartment ( or you) actually passed muster. When I was a tenant in my town, I looked at dozens of places before I pulled the trigger because either the place was so terrible and/or the landlord had such a bad attitude. With the 0.5% vacancy rate in my town, landlords know they can offer hovels and still get tenants. In other communities with higher vacancy rates, due to competition, both the units and the landlord were higher quality.

        The situation is so bad in my town that I cataloged each place I rejected and why, and gave the report to our city council. Landlords may admit in theory that there may be situations where a previous landlord denies a good tenant a good reference, however, in practice, landlords act like no such situation could possibly exist, and so the tenant’s explanation must be a lie or an excuse.

        • Kimberly H.

          Good tenants may not waste time by looking at apartments, but the bad ones do. If we didn’t charge an application fee it would be a full time job processing their applications.

        • Katie Rogers

          How can you possibly know whether an application fee screens out bad tenants? How can you possibly know that someone who does not pay an application fee would be a bad tenant? I have never paid an application fee, and of course neither did my neighbors in the same building. Yet I have rarely lived in a building with a bad tenant. Apparently it is just as possible an application fee screens out good tenants.

    • Maggie Tasseron

      You can’t open a bank account these days without giving your social security number and a photo id. When we rent to anyone, we are allowing them to move into a property that is a huge investment and that is always a risk. The first thing most landlords do is run a credit check and that can’t even be done without a social security no. anyone who refuses to give me these 2 pieces of id would not be renting from me as I would have to assume they are hiding something. And as for your beloved “Golden Rule”: I’ve had the experience more than once of treating people very well only to have them dump all over me and leave my properties looking like a ghetto.

      • Katie Rogers

        It is telling that you assume that someone who in this day of identity theft would not divulge personal information is hiding something. Also, there are plenty of great tenants who simply do not possess SSNs and do not have a credit history in the US. If you therefore refuse them, it could be considered discrimination. As for my “beloved” Golden Rule, its efficacy has been tested over millenia, so it seems you have admitted you do not treat people well because you think treating people is risky. Since the Golden Rule really works as plenty of BP members have attested (even if they did not use the term), perhaps you should examine your business practices and attitudes towards others, especially tenants. If you are getting a lot of looky-loos, maybe the best tenants are voting with their feet.

  8. Jennifer Tornus

    When it comes to the landlord references, the first thing I do is try to find information online that the person listed actually owns the property my prospective tenants were living in. I actually do this before I even call for the reference. It’s not perfect, not all county/parish assessor’s offices allow you to look up property information online. But the parish I live in does and it is just a nice double check to verify the landlord listed actually owns the property.

  9. Susan Maneck

    As a dog owner I just want to point out that a pitbull is more likely to weigh 35 lbs and the lab mix 80 lbs. Of course, But I don’t care much about the weight of a dog, my rule is no aggressive breeds and no puppies, period. In regards to aggressive breeds, I just say my insurance doesn’t allow it, so there is no argument and puppies do too much damage.

        • Katie Rogers

          Maggie and I seem to be having a conflict apparently based on the idea that I think people should treat each other (yes, even tenants) according to the Golden Rule and she doesn’t. She seems so antagonistic to treating people well she even questions whether any landlord would do so. Therefore I understand why she asks the question. The nasty motive behind the question robs it of meriting an answer. However, Scott, I really do not understand why you ask. I have seen apartment buildings with dogs in every unit that were truly horrible and stinky. I have seen other apartment buildings full of dogs that were fine. The problem is not the dog, but the owner. Many landlords are fully aware of the damage children can cause. Some of the landlords on BP can remember a time not so long ago when certain apartment buildings were adult only (but pets were fine).

  10. Adam Ruderman

    I love this article, a lot of very actionable information here. I own 38 units and manage 6 more and learned some new tricks here that I will be implementing immediately, as in tomorrow.

    There’s no doubt that tenant selection is part information (research, credit checks, criminal, etc), part “art” (matching up references and the applicant’s story), and part “gut” instinct.

    Also a fiery comments section, love it. I love the car check idea from the comments. I have occasionally gone to the applicant’s current address to see the condition of their place and had noticed the general age of their car, but hadn’t paid much attention to the interior of the car.

    Here is what a very experienced landlord in my area (40+ years experience) taught me about application fees, and since I started using his method 4 years ago, I have had a major improvement in tenant selection. A $200 deposit is required with the application. Here is the language printed on the application:

    A deposit of $200 is required to be submitted with this application. Each Adult applicant must submit a separate application. Credit checks are performed on all applicants. On approved applications, landlord pays for the cost of the background check fee and the full $200 is applied to the security deposit. When an application is turned down, there is a $50 per person fee charged for the background check and the balance of the deposit is returned to the applicant. I understand that if I am accepted and fail to complete this transaction by signing the lease my deposit will be forfeited in full.

    So what this system does is reward good tenants who are confident they will pass the background check and discourage less worthy applicants from even applying (and wasting your time). Previously we charged a $35 application fee pass/fail but after spending hours on running reports and calling references, applicants would have applied to several other properties as well, and would often say they found a place already (some landlords in my area do no background check at all, so if you have the money, you get the apartment).

    As a result of instituting the $200 system, we receive many fewer applications, but they are generally of higher quality than before. And since starting this system, we’ve only had about 5 forfeited deposits because $200 is more painful to lose than $35.

  11. paul thompson

    Great article. Could anyone elaborate on the “tax records” check. Are you just checking to ensure the landlord provided by tenant is in fact the person holding title? Many properties are owned in LLC’s or trusts that don’t make the person (landlord) obvious. But in the case the landlord owns in their name you could confirm that it matches. Is their more to this check that I’m missing?

    • Mark Ainley

      Sorry for delayed response……if a property is owned by an LLC we want to see that LLC is owned by the landlord. Maybe as a registered agent or as a managing member. In Illinois there is generally some way to still line it up.

  12. Karl B.

    I think using social media (mainly Facebook) is a great tool as well. Although some people have a private profile many people don’t – and there is a wealth of information about them and their personal preferences in the profile.

    • Mark Ainley

      Karl, I have really utilized Linked-In vs Facebook because it gives a better snapshot of their work history. It is much tougher to BS on Linked in then on my application. I like to see if there is anyone that we are mutually connected on that I can call as a reference.

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